Hyundai Motor India expects its share of electric vehicle (EV) sales to jump to as much as 8 percent of total sales by the next fiscal year, an eight-fold increase from roughly 1 percent currently, as the company prepares to launch a small EV built specifically for the domestic market.
“Next fiscal year, we should be touching the industry contribution of about 7-8 percent EV,” Managing Director and Chief Executive Officer Tarun Garg said at a media roundtable on Thursday.
The projected surge would mark a sharp acceleration for Hyundai India, whose electrification push has so far trailed rivals such as Tata Motors, Mahindra & Mahindra, JSW MG and others.
The Indian arm of the Korean automaker has a stated goal to have 50 percent of its sales coming from clean fuel by 2030, which includes hybrids, EVs and CNG, and has committed $5.07 billion in investment.
The company currently sells two EVs in India—the Creta Electric and Ioniq 5—both of which have seen limited success, with its electric market share at 2 percent in Q1 of this fiscal.
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The Creta Electric is not a grounds-up EV, meaning it was built on the same platform as its much popular ICE version, leading to similarity in design. Its sales, though, have begun to improve of late, with volumes rising to around 1,000 units in August compared to 400-500 a month earlier.
“People have really returned to Creta EV and we are seeing very good traction. The gap between the claimed range and the actual range is the minimum in Creta EV. The SDV has a great experience with the customer. It’s very responsive. The driveability is very good,” said Garg who took over as Hyundai India’s first Indian-national MD and CEO on January 1. He was speaking to reporters on the sidelines of the Society of Indian Automobile Manufacturers’ (Siam’s) annual convention in New Delhi.
The carmaker’s other EV, the Ioniq 5, caters to the premium end of the market, with a starting price tag of Rs 55.7 lakh.
The small car it now wants to bring would be Hyundai’s first EV aimed at the mass market.
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On hybrid vehicles, Garg said Hyundai remains agnostic on technology, aiming to bring down costs through localisation rather than betting on one powertrain.
Price, he feels, is the biggest barrier to hybrid adoption and he sees the technology gaining momentum once more, cheaper models come in.
“Range extender or plug-in hybrids only become a good proposition for the customer when they are offered at the right price,” he said. “For me, hybrids only make sense when I have adequately localised it.”
On commodity prices, Garg said there is no respite yet.
Commodity prices have surged by 300 to 400 basis points, he said, but automakers have absorbed most of that rather than passing it on to buyers.
“[Vehicle] price increases have been much lower than the commodity increase. We have all not passed on the full extent of the price increase to the customer,” he said, adding that manufacturers are wary of disrupting demand momentum that followed last year’s goods and services tax (GST) cuts.
The government slashed the indirect tax rate on small cars to 18 percent from 28 percent effective September 22 last year as part of a broader rate rationalisation, while retaining a concessional 5 percent rate for EVs. The move revived demand in the auto industry which was struggling in the first half of the year.
“We are hoping that this is the peak of the commodity prices and soon they will come down,” Garg said.
The CEO also pointed to India’s growing role as a manufacturing base for overseas markets. Exports accounted for about 20 percent of Hyundai’s Indian production three years ago. “That figure has since climbed to 24-25 percent,” he said, with the company targeting close to 30 percent within five years.
The Hyundai Venue, produced exclusively in India for global markets, is central to that push, with Garg saying its exports “can probably be tripled by next year”.